Vroom has added another hub, this time in the Pacific Northwest.
While it has delivered vehicles to the area since its 2012 founding, the company’s Seattle Last Mile hub, located in Kent, Wash., is designed to provide “an experience that includes a more personalized concierge service where customer advocates transport cars directly to car buyers’ driveways on Vroom-branded trucks and show them how to use their new vehicles.”
The hub offers the service to nearly 5.3 million customers within a 25-mile radius.
Vroom has seen significant growth in the Seattle area, with sales to customers there up 87% between 2020 and 2021 and vehicles purchased from area customers climbing 325%.
“With our valued customers in mind, creating a more personalized driveway experience and rolling out more local hubs across the country has been a priority for us at Vroom and we’re excited to launch this offering in Seattle, a city known for car transportation,” Vroom chief logistics officer Mary Kay Wegner said in a news release.
“As we prioritize expanding the Last Mile experience nationwide, we’ll continue to grow and invest in our senior logistics team to support these efforts.”
Vroom opened a hub in Atlanta late last month, and has also recently added hubs in Denver, Chicago, Los Angeles, Detroit and Dallas.
Carvana stands one market shy of offering as-soon-as next-day vehicle delivery to customers in 300 different locations.
On Wednesday, the online used-vehicle retailer officially rolled into market No. 299, as Carvana announced through a news release that it’s working with buyers in Wichita, Kan.
About a month ago, Carvana expanded into seven markets in Washington, Louisiana and Texas. Now, the retailer has a presence in the middle of the Sunflower State.
“Launching in Wichita brings as-soon-as next day vehicle delivery to even more Kansas residents, while introducing new customers to the ease and transparency of our online car buying experience,” Carvana founder and chief executive officer Ernie Garcia said.
“We look forward to growing our presence in the area and offering a great selection at great prices, with the great customer service we’ve become known for," Garcia continued.
Vroom said Monday it has launched new hub in the Atlanta area designed to prove “a more customized driveway experience” for consumers within a 25-mile radius that includes nearly 500 zip codes and 7 million people.
In the past two-and-a-half months, Vroom has added hubs in Denver, Chicago, Los Angeles, Detroit, Dallas and now Atlanta.
The used-car ecommerce platform has delivered in the Atlanta area since its 2012 founding, but its new hub — located in Fairburn, Ga. — aims to provide “an experience that includes a more personalized concierge service where customer advocates transport cars directly to car buyers’ driveways on Vroom-branded trucks and show them how to use their new vehicles.”
The market has proven to be a growing one for Vroom. Sales in the Atlanta area were up 135% between 2020 and 2021, and Vroom upped its consumer purchases by 305% during the same time frame.
“With our valued customers in mind, creating a more personalized driveway experience and rolling out more local hubs across the country has been a priority for us at Vroom and we’re excited to launch this offering in Atlanta, a city well known for its many roadways and heavy highway driving,” Vroom chief logistics offer Mary Kay Wegner said in a release. “As we prioritize expanding the Last Mile experience nationwide, we’ll continue to grow and invest in our senior logistics team to support these efforts.”
Though their net losses and losses from operations increased during the first quarter, both Shift and Vroom boosted their respective ecommerce unit sales by percentages that were in or near triple-digits.
The online used used-car marketplaces each reported their respective Q1 results Wednesday.
Starting with Shift, its quarterly revenue was a record $106.0 million, a 254% hike from Q1 2020.
It has 5,979 total unit sales (up 181%), with ecommerce sales up 213% and making up 4,452 units of that total. Shift had 1,527 wholesale sales for a 116% gain.
Gross profits were at $7.37 million, up 120% year-over-year. Shift reported a $42.8 million net loss, versus the $12.3 million net loss a year ago.
Shift’s loss from operations was $43.97 million, compared to $11.09 million a year ago.
“In the first quarter we delivered extraordinary revenue growth, more than triple last year’s level, including strong sequential growth quarter over quarter. We also tripled our e-commerce unit sales, while keeping our margins strong,” Shift co-chief executive officer and co-founder Toby Russell said in a news release.
“We achieved these record results with focused execution on our business plan, rapid growth in our reconditioning throughput, and continued investment in differentiated technology, coupled with a new marketing strategy that we implemented in mid-February,” Russell said. “Given this trajectory, we are excited about driving strong performance as the year progresses.”
Over at Vroom, total revenues climbed from $375.77 million a year ago to $591.12 million in Q1. Its ecommerce revenue was at $422.31 million, compared to $233.17 million a year ago.
Total unit sales were up 65.6% at 25,920. Its ecommerce sales came in at 15,504 (up 95.5%), with wholesale sales up 84.4% at 8,641 units. TDA sales fell 41.5% at 1,775.
Total gross profits climbed 96.7% at $36.18 million. Vroom’s loss from operations was $75.5 million for the quarter, an 84.4% hike. Its net loss of $77.2 million was an 88% hike.
Vroom CEO Paul Hennessy said in a release: “Vroom delivered record results in the first quarter of 2021, with total gross profit nearly doubling versus the same period in the prior year as we delivered exceptional growth and improving unit economics. Our strong results were led by robust ecommerce unit growth of 96%, coupled with accelerating ecommerce gross profit per unit through the quarter.
“Demand for our convenient, online used-vehicle shopping experience remains strong in a dynamic environment, and we continue to reap benefits from scaling our hybrid, asset-light model,” he said.
“As we look ahead, we will continue to execute against our plan to increase the velocity of our flywheel by growing inventory, expanding reconditioning capacity, and investing in logistics and our end-to-end ecommerce experience, among other initiatives, to deliver an attractive offering for our customers and demonstrate improvement in our unit economics over time.”
Shift is selling cars in Texas for the first time.
The used-vehicle ecommerce platform said Monday that consumers in the Austin-San Antonio region can buy and sell cars through Shift.
Consumers could already sell their vehicles to Shift in four of the state’s markets, but this move marks the first full-service market where they can buy from Shift.
“It has long been our goal to be able to serve the communities of Texas with a fair, accessible process for purchasing a vehicle,” Shift co-chief executive officer Toby Russell said in a news release.
“We believe Texans are ready for a smarter way to buy used cars, and we're excited to be able to offer that.”
Shoppers throughout Texas can tap into the company’s online purchase purchase. And consumers in the greater Austin-San Antonio region can utilize Shift’s at-home test drives, the company said.
There are now a combined seven markets throughout California, Texas, Washington and Oregon where consumes can utilize Shift’s in-person buyer experience.
It’s been a busy week for Carvana near the picturesque mountains of Utah and along the shores of the Gulf of Mexico.
But Carvana hasn’t been on vacation. Rather, the company opened seven more locations to expand its digital retailing footprint for onsite delivery to 279 markets.
The newest locations where Carvana now does business include the Utah cities of Ogden, Provo and Salt Lake City.
In the South, Carvana now has operations in Alabama to serve potential buyers in Mobile and Daphne. Meanwhile, Carvana’s Florida operations now involve digital retailing in Crestview and Pensacola.
Carvana founder and chief executive officer Ernie Garcia pointed out that the company’s location in Provo gives it the chance to work with students, faculty and other individuals connected with Brigham Young University to go with other opportunities in the Beehive State.
“Salt Lake City is a growing area with a variety of vehicle needs and wants,” Garcia said in a news release. “Our expansion to Ogden allows us to schedule as-soon-as next day vehicle deliveries to even more Utah residents and bring new customers great prices and a great selection, 100% online.”
Garcia is also enthused about being making an “entrance into one of the largest metro areas in Alabama” by setting up in Mobile. Meanwhile, Carvana also now has a presence just across Mobile Bay in Daphne, too.
And finally, Carvana’s footprint in the Sunshine State is one of the company’s largest, now retailing digitally in 14 markets.
“We’ve called Florida home for many years, now, and we found that Floridians have enjoyed the transparency and ease that Carvana brings to the car buying experience,” Garcia said.
“We’re continuing our momentum and addressing the demand we’ve experienced in Florida the last several years,” he added.
Minnesota Mitsubishi dealer Richard Herod III likes what the automaker is doing through ClickShop, an online showroom powered by digital retailing solutions provider Motoinsight.
Mitsubishi Motors North America explained that ClickShop is a custom, 24-hour digital showroom for consumers to shop across Mitsubishi’s entire dealer network.
ClickShop can allow customers to browse real-time inventory at nearby dealers, build a custom deal with pre-populated, applicable incentives, including payment, trade, and taxes. Shoppers also can submit their credit application and book an in-person or virtual appointment.
And among the potential beneficiaries of ClickShop is Herod, who is dealer principal at White Bear Mitsubishi in White Bear Lake, Minn., which is located northeast of Minneapolis.
“We want people to feel good about buying a car, after all it is one of the most expensive purchases people will make in their lifetime,” Herod said in a news release from the automaker distributed on Monday.
“This means we have to meet them where they are, be respectful of their time and sensitive to their budget, and we must be transparent. ClickShop allows us to show up for and support our customers, even before they walk in the door,” he continued.
ClickShop, which the automaker said can be as simple as “click, click, car,” was designed with the modern customer in mind and in partnership with Motoinsight. Mitsubishi said it is just the second automotive manufacturer to launch a fully integrated, digital retail experience across its sales network, directly from the manufacturers’ website.
The company said its platform can allow customers to see the full picture of inventory in their area, right from their phone, tablet or laptop. Customers are also not required to submit their contact information to unlock deals.
Mitsubishi and Motoinsight also said they will continue to roll out additional functionality for the platform, with the ultimate goal of breaking down unnecessary and burdensome barriers to the vehicle-buying process and providing a more seamless experience for customers.
The automaker added that it rolled out ClickShop as the OEM prepare to make a flurry of product launches, including the all-new 2022 Outlander.
“Mitsubishi Motors has so much to be proud of in 2021,” Mitsubishi Motors North America chief operating officer Mark Chaffin said. “We are delivering a bold, capable and stylish lineup of vehicles that will result in one of the freshest showrooms in the industry, and we are delivering a fast, fair and fun car-buying experience to our customers.
“Tools like ClickShop allow us to deliver on what really matters to the modern customer by using data in a thoughtful, strategic way,” Chaffin went on to say.
Market Scan co-founder and president Rusty West joins the Auto Remarketing Podcast, where he talks with senior editor Joe Overby about why the puzzle pieces are in place for digital retailing in 2021.
Plus, they talk a little auto racing.
To listen to this episode, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
Service providers of many stripes within digital vehicle retailing often remark about the “Carvana model” when touting their offering or discussing the general state of the industry.
But how is Carvana really doing? Well, the company reported after the markets closed on Thursday that it finished 2020 with a 37% increase in retail units sold, a 42% rise in revenue and a 57% jump in total gross profit fueled by a $400 uptick gross profit per unit.
With all of those tremendous gains, Carvana said that its annual net loss came in at $462 million, an increase from the $365 million loss recorded in 2019.
Carvana founder and chief executive officer Ernie Garcia certainly appears to be confident of the company’s long-term potential, saying in a news release, “2020 highlighted the strengths of our business model and validated our vision for the future of car buying.
“We’re extremely proud of how our team navigated an unprecedented year of constant adaptation,” Garcia continued. “Their exceptional execution and relentless focus on delivering the best experiences to our customers vaulted us to becoming the second-largest seller of used cars in the country, another meaningful milestone in our march to becoming the largest and most profitable automotive retailer.”
Here are more specific details about Carvana’s 2020 performance:
• Retail units sold totaled 244,111, an increase of 37%
• Revenue totaled $5.587 billion, an increase of 42%
• Total gross profit was $794 million, an increase of 57%
• Total gross profit per unit was $3,252, an increase of $400
Another segment of Carvana’s business that made major improvements in 2020 was purchasing vehicles from consumers, acquiring 204,000 units last year. That figure is up 95% year-over-year, as Carvana purchased 104,000 units from consumers in 2019.
Carvana also highlighted that it enhanced its footprint in three ways during the closing quarter of the year, including:
• Launched two new inspection and reconditioning centers in a quarter for the first time, opening its 10th near Orlando, Fla., and 11th near Memphis, Tenn.
• Opened two vending machines near Detroit and in Atlanta, bringing its end-of-year total to 27
• Added five new markets, bringing its end-of-year total to 266 covering 73.7% of the U.S. population
In a letter to shareholders, Carvana discussed its expectations and objectives for 2021.
“We expect to accelerate growth in retail units sold, and with demand for our offering currently outpacing our supply chain capacity, we expect the level of growth and timing of sales to be governed primarily by the speed at which we scale our production,” the company said.
“We expect revenue growth in FY 2021 to be in line with retail units sold growth,” Carvana continued. “We expect total GPU, which includes retail, wholesale, and other gross profit, in the mid-$3,000’s in FY 2021, continuing our progress on increasing GPU. Finally, in light of the size of our opportunity and our strong financial position, we expect to invest in building our business for the long-term, leading to a small EBITDA margin loss in FY 2021 while continuing our progress on demonstrating leverage.
“We are excited about 2021 which we expect to be another significant step toward our long-term goals,” the company reiterated.
